Work Permit in Labuan
Q1: Hi, I am a director of a Labuan company. Can I live and work in Malaysia?
A1: Certainly! You can apply for a 2 year renewable work permit which allows multiple entry into Malaysia with no visa required. With the work permit, you can conveniently enter and live in Malaysia to facilitate your business meetings and to carry out your business operation.
Q2: If I want to employ an expatriate to work with me in my Labuan company, can he obtain a work permit?
A2: Yes, he is eligible to apply for work permit. However, it should only be in respect of the following position as specified by the Immigration Department of Malaysia –
- • Top management (i.e. Chief Executive Officer, Chief Financial Officer, Chief Operating Officer)
- • Technical experts (i.e. IT specialist or other specialists related to Labuan trading activities)
- • Professionals such as accountant, lawyer, consultant, underwriter, economist, advisor, engineer, actuary, trader) – please note this is only applicable if you own a Labuan International Commodity Trading Company
Q3: My family would like to join me to live in Malaysia. Am I able to sponsor them with my work permit?
A3: Yes, your spouse, children under age 21 and your parents may apply for dependent pass under your work permit.
Q4: With the work permit under my Labuan company, can I stay in any parts of Malaysia?
A4: Unfortunately, no. Currently, you are only eligible to stay in the Peninsular Malaysia or Labuan.
Q5: Can you share with me on the eligibility criteria to apply for work permit?
A5: Sure, there’s a few checklists to be fulfilled –
- • Minimum income of RM10,000 per month which may consist of basic salary, cash allowance, benefits-in-kind, value of living accommodation and other fees and commissions;
- • Possess competency and working experience related to the position applied; and
- • Fit and proper person requirements
Q6: Brilliant! Are there documents that need to get prepared for my work permit application?
Documents to be submitted to Labuan FSA as follows –
- • Business plan;
- • Employment contract;
- • Income tax reference number (Labuan entity, employer’s tax reference and employee’s tax reference); and;
- • Any other documents required.
All supporting documents can be certified by a Commissioner for Oaths, Notary Public, CPA, lawyer, company secretary or authorised officers of Malaysian/foreign embassies. Documents not in the national language of Malaysia or English is required to be translated by a qualified translator.
Q7: I am told that I need a residential address in Malaysia to apply for work permit? Is this the case?
A7: That is true, however, it is no longer a requirement under the new guideline issued by Labuan FSA. Instead, the employer or company must provide an address in Labuan or Malaysia be it an operational office, co-located office or marketing office.
Q8: Do I have to come to Malaysia to apply for work permit?
A8: Once your work permit is approved, you are required to visit Labuan and proceed to the Immigration Department for visa stamping on your passport. This meeting is only mandatory for first time application of the work permit.
You may also be required to attend an interview session conducted by Labuan FSA at their discretion.
Q9: Am I subjected to personal income tax after obtaining my work permit?
A9: Expatriates receiving income from a Labuan company is required to file tax returns with Malaysia Inland Revenue Board (“IRB”).
Your employment income is taxable by the IRB and you are required to file for personal tax return before 30th April annually. You are entitled to enjoy 50% tax rebate on your employment income derived from the Labuan company.
Q10: Aside from salary derived from Labuan company, I expect to receive director’s fee. Will it be subjected to tax as well?
A10: Director’s fee is not taxable. However, you are required to declare this income in your personal tax filings annually.